The bloc added 27 individuals and 36 companies to the list of banned allies of Mugabe because of their links to suspected human rights abuses, EU officials said. They took off the name of one person who has died.
Diplomats have said the revised sanctions list — which is due to be made public later this week — will include for the first time companies registered in the EU.
"The (EU) Council condemns the regime for its ongoing failure to address the most basic economic and social needs of its people," the bloc’s foreign ministers said in a statement.
"The situation in Zimbabwe has deteriorated in a manner that stands in stark contrast to the duties and responsibilities of governments…the victims of this misrule are the Zimbabwean people."
Zimbabwe is in the grip of a humanitarian and economic crisis. Prices double every day and more than 2,000 people have died in a cholera epidemic.
The move brings the EU’s Zimbabwe sanctions list to more than 200 people and 40 companies by adding government members and relatives of Mugabe allies.
These people cannot travel to the EU and their assets there are frozen. The EU officials said the assets of the firms, shell companies that the bloc considers support Mugabe’s government, will also be frozen.
The EU ministers urged the Kimberley Process, an international certification scheme to ensure diamonds do not fund conflict, to probe Zimbabwe’s diamond trade. They expresed concern that the trade in illicit diamonds provided financial support to the Mugabe government.
The World Diamond Council has put Zimbabwe’s production of rough diamonds at 0.4 percent of world output, mostly exported with the Kimberley Process certificate.
Mugabe meets regional leaders at a summit in South Africa on Monday to seek approval to form a government with or without his rivals, a stance critics say will deepen his country’s crisis.
Mugabe and Morgan Tsvangirai, leader of the opposition Movement for Democratic Change (MDC), signed a power-sharing agreement in September but have been deadlocked over control of cabinet posts, with neither side showing any sign of compromise.
Critics doubt international sanctions have any effect on Mugabe, who has held a firm grip over power in Zimbabwe since independence from Britain in 1980. Mugabe accuses Western sanctions of having ruined his country’s economy.